QPFC Practice Questions - NAPA Qualified Plan Financial Consultant (QPFC) Exam

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An advisor signs an agreement assuming ERISA §3(38) status for the investment menu of a participant-directed 401(k) plan. What is the resulting allocation of investment-selection fiduciary responsibility?

The §3(38) manager has full discretionary authority and bears fiduciary liability for the lineup it constructs, while the named fiduciary retains a duty to prudently select and monitor that manager The plan sponsor remains fully liable for individual fund selections; the §3(38) appointment is purely advisory Liability is shared 50/50 between the §3(38) manager and the plan sponsor The §3(38) appointment shifts all fiduciary liability, including the duty to monitor, to the manager

Correct Answer:

The §3(38) manager has full discretionary authority and bears fiduciary liability for the lineup it constructs, while the named fiduciary retains a duty to prudently select and monitor that manager

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